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Messages - Priya

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Investment in Bangladesh - Potential Sectors for Investment

Bangladesh is one of the fastest growing economies in the world. A recent report of PWC, a renowned economy reviewer projects that Bangladesh is going to be the 23rd largest global economy in the world by 2050 which is another good news for the investors. The investors who are intelligent and far-sighted, forward looking may be able to take this unique opportunity of investment advantage in Bangladesh. Its business friendly policies, suitable geographical location and skilled labour force at cheap wages are the basic facilities to beacon the entrepreneurs.

The potential investment areas in Bangladesh are power generation, distribution and exploration of gas and other mineral resources, highway development including bridge, express-way and tunnels, Port infrastructure facilities, Industrial parks/private export processing, computer software and electronics, diversified jute goods and jute based pulp and study, chemicals and petrochemicals, LP gas, environment friendly insecticides, leather and leather goods, tourism, food processing, Fruit canning and allied products, sports goods, light, engineering and agro-based industry etc.

Agri-business Sector

The abundance of natural resources available in Bangladesh supports a range of highly profitable investment opportunities in agribusiness. Over 90 varieties of vegetable are grown in Bangladesh, yet in this fertile land there is under utilisation of the country’s agricultural capacity. This presents many opportunities for investors seeking to export agricultural products, or to meet the rapidly growing local demand.

Investment Areas

    -Agri-input sectors like seed, fertilizer, Pesticide, irrigation & Farm Machinery
    -Post-Harvest infrastructure
    -Food processing like eligible oil, rice, sugarcane, potato, fruits & vegetables & spices

Special Incentives

    -100% foreign equity is allowed (Except for defense, nuclear energy, currency and forest plantations)
    -Tax incentives for 5-7 years based on location and industry dependent
    -Cash Incentives: electricity consumption special rebate of 20% to agro-processing sector
    -Tariff-free access to European union
    -Cash incentives and export subsidies for selected export products ranging from 5% to 20%
    -Loan disbursement target in agriculture is USD 2 Billion
    -Entrepreneurs Equipment Fund is allowed agro-sector
    -More than 47.5% of population dependent on agriculture for livelihood

Garments & Textile Sector

From spinning to weaving, from knitwear to leisurewear and high street fashions, the textiles and clothing industry is Bangladesh’s biggest export earner. Our factories design and produce for the world’s leading brands and retailers. This rapidly growing sector of the Bangladeshi economy offers a unique competitive edge that supports profitable expansion into new strategic markets.

The growing trend in the textile and the garments sector means that Bangladesh is perfectly positioned to appeal to foreign investors.

    -Cost and quality of products that are produced on time, reliably and very competitively with a highly skilled labor force.
    -A unique regional location for expansion into key Eastern and other markets.
    -Favored trading status with the EU and the USA.
    -Clusters of companies providing a local supplier base with real depth in skilled labor, training and technical development facilities

ICT Business Sector

ICT and its related business services in Bangladesh are a vibrant sector supported by an enthusiastic culture and a government committed to providing a pro-business climate for all investors. Over 400 IT companies are now thriving in the country supplying to local and international markets worldwide.

    -Over 800 IT companies are now thriving in the country and capturing a significant share in the international markets worldwide.
    -Total estimated IT Industry Size is US$ 120 Million (including export)
    -Software contributes around 44% to the overall industry revenue, whereas ITES contributes around 56% to the overall industry revenue.
    -Approx 30000 professionals, majority IT and other graduates, are employed in the industry. In terms of creating high-quality employment software and IT service industry is surely one of the top graduate employment sectors in the country.
    -Total investment in this sector is more than 50000 crore and this sector is the largest contributor to FDI in Bangladesh.
    -Online outsourcing, data entry and call center business are flourishing.
    -In the next 5 years, 1% of the country’s total GDP will come from the software and IT servicessector.

Leather and Leather Goods

Bangladesh has a long established tanning industry which produces around 3-4% of the world’s leather from a ready supply of raw materials. The country is therefore an established and attractive location to source and outsource the manufacture of finished leather products. The leather industry is ideally suited to Bangladesh with its abundance of labor and natural resources at internationally competitive rates.

    -Contributes more than 54.69 billion USD annually to the Economy
    -207 tanneries can produce 300 million square feet crust leather and 140.39 million square feet finished leather
    -Employment is about one lakh
    -Leather sector crossed the $1 billion mark in annual exports in 2015-16
    -The sector is included as “Thrust sector” highest priority is Footwear Leather Goods

Light Engineering Sector

The burgeoning domestic market and the prospect of significant cost reductions for companies sourcing components and finished goods for international markets makes Bangladesh a compelling choice for investors.

    -40,000 light engineering workshops/enterprises operating. About one million people and innovative entrepreneurs are actively engaged
    -Annual turnover is US$ 1600 million of which Import substitute products is around US$ 200 million
    -Over 90% of light engineering industries are serving the local needs of the people.
    -10% cash incentives for export
    -Availability of trainable labors at competitive cost
    -Declared as special development sector in its Export Policy

Electric & Electronic Sector

The high skill, low cost labor resource of the electronics sector in Bangladesh offers companies great returns on investment. Whilst the global market for semiconductors is worth in excess of $200bn and is dominated by the Asian economies, Bangladesh has significant financial and economic factors in its favor that make it the best choice for many companies.

    -Global Electrical and Electronic products are highly branded. Bangladesh is producing mostly for the domestic market.
    -Bangladesh encourages private sector investment with 100% foreign ownership.
    -Aprox USD 9bnmarket demand while local production approx. USD 1bn
    -More than 3000units are in operation, creating employment (direct and indirect) 1 million & 0.4 million
    -Major Import substitution opportunity exists
    -Middle class consumers of Bangladesh consist population more than Malaysia, Singapore or Thailand

Power Sector

Bangladesh is progressing through a phase of development where automation is the key to its economy and business. As the country continues to industrialize the importance of power generation and electricity supply becomes a key government priority.

    -The government has given top priority to the sector considering its importance in the overall development of the country.
    -As the country continues to industrialize the importance of power generation and electricity supply becomes a key government priority.
    -At present, 48.5% of the total population of Bangladesh is enjoying the electric facilities.
    -Total demand is projected to be more than 12000MW in 2017.
    -Bangladesh needs total USD 18 billion investments in the power sector to minimize this demand-supply gap
    -Public and private sector produce 63% and 37% of electricity respectively.
    -The power sector is a capital-intensive industry, huge investments are required in order to generate addition to the capacity.
    -USD 40 billion investment will be required for new generation and USD 8 billion for transmission network.
    -Private sector Power Generation Policy of Bangladesh has offered attractive fiscal and non-fiscalincentives.

Pharmaceutical Sector

The pharma industry of Bangladesh is now on the verge of entering highly regulated overseas markets like USA and Europe. In this connection, several pharma manufacturers have already made huge investments in their new state of art manufacturing facilities. A number of companies have already obtained or in the process of obtaining UKMHRA, EU, TGA, AUSTRALIA and GCC certifications.

    -Export earnings reached USD 82.109 million in 2015-16
    -Exported to more than 83 different countries over the last 7 years, an export growth rate recorded 25.5% annually.
    -Bangladesh holds the 14th position in 17 regional markets surveyed in BMIs Pharmaceutical, also occupies 67th position in BMI’s pharmaceutical universe.
    -Growing at 24.63% annually and it is now a billion dollar market (doubled in the last 4 years)
    -Pharmaceuticals market projected to grow to 2.00 billion by 2017
    -Domestic manufacturers account for 97% of the drug sales, remaining 3% is imported.
    -About 5,600 brands of medicines are manufactured
    -257 registered companies, 1,495 wholesale drug license holders, and about 37,700 retail drug license holders.
    -API park where 40 API industries will be able to operate.
    -Bangladesh has the most liberal FDI regime in South Asia
    -The WTO TRIPS agreement permits Bangladesh to reverse-engineer patented generics till 2033 to sell locally and export to markets around the world.

Ceramics Industry

Traditionally, the tableware industry is labor-intensive and companies in developed countries experience difficulties in remaining competitive. Bangladesh, being a gas-rich and low-labor-cost economy, is perfectly positioned to be a strategic partner in production and supply of ceramic products. Investment interests in this sector are strongly welcome.

    -The global ceramics industry is worth more than $10bn.
    -Bangladesh produces a high-quality bone china.
    -Bangladesh exported to about 55 countries, amounting to about USD 376 million in 2015-16
    -The export destinations are EU, USA, Italy, Spain, France, New Zealand, the Netherlands, Australia, Sweden and the Middle East.
    -54 ceramic manufacturers are operating in Bangladesh, creating employment of 0.5million.
    -Investment in this sector is worth USD 462 million with the possibility of expanding.
    -Demand is USD 250 million & Bangladesh produced USD 233 million worth products in June, 2017.

Tourism Sector

Bangladesh is a unique tourist destination where one can find the scopes for all kinds of tourist interest as well as investment. Bangladesh has taken some commendable initiatives including creation of tourist accommodation and amusement facilities across the country. Government of Bangladesh has recognised tourism as an industry and framed a new National Tourism Policy in 2010 for the development of domestic and international tourism in the country. The government has also enacted ‘Tourism Protected Area and Exclusive Tourist Zone’ Law in 2010 for attracting foreign investments in these ETZs.

Bangladesh offers lucrative and competitive opportunities for the foreign investment to create multi-faceted tourist facilities around the tourist sites. At present, private investment in this sector is gradually increasing due to the government pro-foreign and private sector tourism-friendly policy. Foreign investment in the tourism sector of Bangladesh is always welcome.

    -Tourist spots the country such as Cox’s Bazar, Kuakata, Kantajee Tample, Saint Martin’s Island, Sonargoan, Sylhet, Sundarbans, Ramsagor, and so on have attained huge number of tourist
   -About half a billion USD was earned from the tourism sector in 2017.
    -People of Bangladesh are very hospitable and tourist friendly.
    -Unique archaeological sites, cultural heritage and eco-tourism products like the world’s largest mangrove forest, the Sundarbans, the world’s longest unbroken sea beach in Cox’s Bazar (120km), the oldest archaeological site in the Southern Himalayas-Paharpur and world’s largest terracotta temple – Kantaji Temple in Dinajpur, and spectacular monuments and mausoleums of language movement and liberation war of the country.
    -The WTTC predicted that by 2023, travel and tourism will directly generate 2 million jobs and support an overall total of 4 million jobs, or 4.2 percent of the country’s total employment.
    -This would represent an annual growth rate in direct jobs of 2.9%

Frozen Foods

Frozen foods is the second largest export sector of the economy. The massive natural resources available in Bangladesh make this sector particularly promising for investors looking to supply in international as well as in domestic markets.

    -The government is promoting semi-intensive shrimp farming.
    -Shrimp processing and export industry is largely dominated by the small business sector.
    -Government has developed initiatives of quality assurance for frozen foods in co-operation with exporters.
    -15% cash incentive offered to shrimp export amount.

Health Care Sector

    -Around Two Billion Dollars of the untapped Healthcare, the market is now in Bangladesh.
    -Bangladesh spends around 2.04 billion US dollars abroad for medical treatment in a year. This amount is 1.94 percent of total GDP of Bangladesh.
    -The demand of Health Care growing 21% annually.
    -The demand for health care services is accelerating because of increasing purchasing power of the growing middle and upper middle classes.

Medical Equipment Sector

    -The medical device market is projected to USD 243.6 million in 2018
    -Hospitals in Bangladesh experienced up to 22.5% growth in patients in 2011
    -The large medical equipment market of Bangladesh is almost import dependent
    -Medical equipment manufacturing is a potential sector to invest and set up plants in Bangladesh
    -Huge private hospitals in recent years represent the best opportunity for selling expensive high-end equipment and medical devices.
    -Government builds hundreds of new healthcare facilities and upgrades existing facilities and equipment.

Renewable Energy Sector

    -Economic growth of 7% calls for the scalability of its power infrastructure to keep up with the demands of industry and increased urbanization.
    -Currently, renewable energy makes up 2.5% of the total electricity generation
    -The importance of an alternative source of energy in Bangladesh.
    -Solar energy is the most prominent source of renewable energy
    -Successfully implemented one of the biggest Solar Home System (SHS) projects
    -Around 3 million SHSs have been successfully installed
    -Hydro power, Micro, mini and pico hydro power plants can also be used

Automobile Sector

    -Local Demand USD 2.5 Billion
    -Raw Material Source 5:95 (Local: Imported)
    -Future Investment Possibility: USD 2.5 to 3 billion
    -Future Employment option: 1.5 Million
    -Import Situation: 2.01 Billion
    -Nearly 60% of the total population is economically active and almost a million graduates enter the workforce annually

Ship Building Sector

    -Number of Companies: 130
    -Ships made in Bangladesh are 15% cheaper than even Chinese ships and are of the same quality
    -The productivity of labors is good & average hourly labor charge in is only US$ 1.00
    -Global shipbuilding market size is US$ 1,600 billion. 1% of the global order for only small ships market the amount will be worth US$ 4 billion for Bangladesh
    -Present capacity is 0.84% of global shipbuilding production
    -Declared as “Thrust Sector” in a different policy.
    -5 %t incentive on export


Revolt On The Horizon? How Young People Really Feel About Digital Technology

As digital technologies facilitate the growth of both new and incumbent organisations, we have started to see the darker sides of the digital economy unravel. In recent years, many unethical business practices have been exposed, including the capture and use of consumers’ data, anticompetitive activities and covert social experiments.

But what do young people who grew up with the internet think about this development? Our research with 400 digital natives – 19- to 24-year-olds – shows that this generation, dubbed “GenTech”, may be the one to turn the digital revolution on its head. Our findings point to a frustration and disillusionment with the way organisations have accumulated real-time information about consumers without their knowledge and often without their explicit consent.

Many from GenTech now understand that their online lives are of commercial value to an array of organisations that use this insight for the targeting and personalisation of products, services and experiences.

This era of accumulation and commercialisation of user data through real-time monitoring has been coined “surveillance capitalism” and signifies a new economic system.

Artificial intelligence

A central pillar of the modern digital economy is our interaction with artificial intelligence (AI) and machine learning algorithms. We found that 47% of GenTech do not want AI technology to monitor their lifestyle, purchases and financial situation in order to recommend them particular things to buy.

In fact, only 29% see this as a positive intervention. Instead, they wish to maintain a sense of autonomy in their decision making and have the opportunity to freely explore new products, services and experiences.

The agency pendulum swings between the individual and technology. Who will take control?

As individuals living in the digital age, we constantly negotiate with technology to let go of or retain control. This pendulum-like effect reflects the ongoing battle between the human and technology.

My life, my data?

Our research also reveals that 54% of GenTech are very concerned about the access organisations have to their data, while only 19% were not worried. Despite the EU General Data Protection Regulation being introduced in May 2018, this is still a major concern – grounded in a belief that too much of their data is in the possession of a small group of global companies, including Google, Amazon and Facebook. Some 70% felt this way.

In recent weeks, both Facebook and Google have vowed to make privacy a top priority in the way they interact with users. Both companies have faced public outcry for their lack of openness and transparency when it comes to how they collect and store user data. It isn’t long ago that a hidden microphone was found in one of Google’s home alarm products.

Google now plans to offer auto-deletion of users’ location history data, browsing and app activity as well as extend its “incognito mode” to Google Maps and search. This will enable users to turn off tracking.

At Facebook, CEO Mark Zuckerberg, is keen to reposition the platform as a “privacy focused communications platform”, built on principles such as private interactions, encryption, safety, interoperability (communications across Facebook-owned apps and platforms) and secure data storage. This will be a tough turn around for the company that is fundamentally dependent on turning user data into opportunities for highly individualised advertising.

Facebook is trying to restore trust.
PK Studio/Shuttestock

Privacy and transparency are critically important themes for organisations today – both for those that have “grown up” online as well as the incumbents. While GenTech want organisations to be more transparent and responsible, 64% also believe that they cannot do much to keep their data private. Being tracked and monitored online by organisations is seen as part and parcel of being a digital consumer.

Despite these views, there is a growing revolt simmering under the surface. GenTech want to take ownership of their own data. They see this as a valuable commodity, which they should be given the opportunity to trade with organisations. Some 50% would willingly share their data with companies if they got something in return, for example a financial incentive.

Rewiring the power shift

GenTech are looking to enter into a transactional relationship with organisations. This reflects a significant change in attitudes from perceiving the free access to digital platforms as the “product” in itself (in exchange for user data), to now wishing to use that data to trade for explicit benefits.

This has created an opportunity for companies that seek to empower consumers and give them back control of their data. Several companies now offer consumers the opportunity to sell the data they are comfortable sharing or take part in research which they get paid for. More and more companies are joining this space, including, Killi and Ocean Protocol.

Sir Tim Berners Lee, the creator of the world wide web, has also been working on a way to shift the power from organisations and institutions and back to citizens and consumers. The platform, Solid, offers users the opportunity to be in charge of where they store their data and who can access it. It is a form of re-decentralisation.

The Solid POD (Personal Online Data storage) is a secure place on a hosted server or the individual’s own server. Users can grant apps access to their POD as a person’s data is stored centrally and not by an app developer or on an organisation’s server. We see this as potentially being a way to let people take back control from technology and other companies.

GenTech have woken up to a reality where a life lived “plugged in” has significant consequences for their individual privacy, and are starting to push back, questioning those organisations that have shown limited concern and continue to exercise exploitative practices.

It’s no wonder that we see these signs of revolt. GenTech is the generation with the most to lose. They face a life ahead intertwined with digital technology as part of their personal and private lives. With continued pressure on organisations to become more transparent, the time is now for young people to make their move.


Hackers hit global telcos in espionage campaign: Cyber research firm

Hackers have broken into the systems of more than a dozen global telecoms companies and taken large amounts of personal and corporate data, researchers from a cyber security company said on Tuesday, identifying links to previous Chinese cyber-espionage campaigns.

Investigators at US-Israeli cyber security firm Cybereason said the attackers compromised companies in more than 30 countries and aimed to gather information on individuals in government, law-enforcement and politics.

The hackers also used tools linked to other attacks attributed to Beijing by the United States and its Western allies, said Lior Div, chief executive of Cybereason.

“For this level of sophistication it’s not a criminal group. It is a government that has capabilities that can do this kind of attack,” he told Reuters.

China has repeatedly denied involvement in any hacking activity.

Cybereason declined to name the companies affected or the countries they operate in, but people familiar with Chinese hacking operations said Beijing was increasingly targeting telcos in Western Europe.

Western countries have moved to call out Beijing for its actions in cyberspace, warning that Chinese hackers have compromised companies and government agencies around the world to steal valuable commercial secrets and personal data for espionage purposes.

Div said this latest campaign, which his team uncovered over the last nine months, compromised the internal IT network of some of those targeted, allowing the attackers to customize the infrastructure and steal vast amounts of data.

In some instances, they managed to compromise a target’s entire active directory, giving them access to every username and password in the organization. They also got hold of personal data, including billing information and call records, Cybereason said in a blog post.

“They built a perfect espionage environment,” said Div, a former commander in Israel’s military intelligence unit 8200. “They could grab information as they please on the targets that they are interested in.”

Cybereason said multiple tools used by the attackers had previously been used by a Chinese hacking group known as APT10.

The United States indicted two alleged members of APT10 in December and joined other Western countries in denouncing the group’s attacks on global technology service providers to steal intellectual property from their clients.

The company said on previous occasions it had identified attacks it suspected had come from China or Iran but it was never certain enough to name these countries.

Cybereason said: “This time as opposed to in the past we are sure enough to say that the attack originated in China.”

“We managed to find not just one piece of software, we managed to find more than five different tools that this specific group used,” Div said.


Newspaper / Exporters may get more cash incentives
« on: June 27, 2019, 11:23:16 AM »
Exporters may get more cash incentives

The government mulls over increasing the cash incentive for exports by one percentage point as it looks to motivate exporters to leverage the sudden opportunities presented by the US-China trade war.

Currently, 26 sectors are provided with cash incentives ranging from 2 percent to 20 percent of their export proceeds to encourage higher shipments.

But garment exporters, who fetch more than 80 percent of the country’s export receipts, demanded more cash incentives in the incoming fiscal year to tide them through the rising costs amid implementation of the new wage scale in the industry.

The finance ministry though is planning to extend the facility to all sectors as the escalating US-China trade war has suddenly expanded Bangladesh’s export market.

The export growth, which slowed down last fiscal year, has started looking up again this fiscal year thanks to the trade war kick-started by US President Donald Trump in 2018.

In the first ten months of fiscal 2018-19, export receipts soared 11.6 percent year-on-year in contrast to 6.41 percent registered a year earlier, according to data from the Bangladesh Bank.

Like every year, the government allocated Tk 4,500 crore for cash incentive purpose in the current budget.

Of the amount, Tk 500 crore went to the jute sector and the other Tk 4,000 crore was allocated for all sectors, including textile and garments, according to finance ministry statistics.

So if the cash incentive is increased by one percentage point next fiscal year, as decided in a budget meeting chaired by the prime minister earlier this week, the total amount would be Tk 5,000 crore.

Textile and garment sectors get the lion’s share of the cash subsidy.

At present, garment makers that use local yarn enjoy subsidy of 4 percent on their export earnings.

Those who export to new markets -- which are destinations other than the US and the EU -- also get cash subsidy.

Garment exporters demanded 5 percent cash incentive due to the rising cost after the wage hike, said Siddiqur Rahman, the immediate past president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA). Moreover, the prices of garment products declined in the international market, he added.

The near-term export outlook is fairly good, particularly in the context of the renewed tariff escalation between the US and China, said Zahid Hossain, lead economist of the World Bank’s Dhaka office.

“The rationale for a further increase in cash subsidy to exports is thus not immediately obvious.”

It is also possible to support both exports and remittances by allowing greater flexibility to the exchange rate.

“This has the advantage of providing essentially the same cash support without much additional pressure on the budget, except for the rise in the cost of imports in taka, which can be managed through appropriate import tariff adjustments.”

He estimated that one taka increase in the exchange rate would be equivalent to Tk 15 billion subsidies to remittances (assuming it is $15 billion) and Tk 37 billion gross (since their cost of imports will also rise) subsidy to all exports (assuming $37 billion exports).


Newspaper / Containers pile up at Ctg port
« on: June 27, 2019, 11:19:09 AM »
Containers pile up at Ctg port

Import-laden containers are piling up at Chattogram port mainly due to slow delivery as operations of factories and vehicular movement are yet to return to normalcy following the Eid vacation.

This may lead to container congestion in the coming days as a good number of vessels carrying imports are already waiting in the sea to unload containers, port users say.

Both the delivery of import containers directly from the port and the transport of a good portion of import containers from the port to private off-dock facilities have slowed since the day before Eid day.

Around 3,000 to 4,000 TEUs (twenty-foot equivalent units) of import containers are currently being received at the jetties from the vessels every day, whereas 1,000 to 1,200 TEUs are being delivered.

If the situation does not improve, it may also slow down the unloading of containers from the vessels, said the port users.

According to the data of the port, 31,514 TEUs of import containers were lying at the port till 8:00am on June 4. As of yesterday morning, it had reached 41,739 TEUs.

This means more than 4,000 TEUs of additional import-laden containers have been stockpiled at the port yards, exceeding the port’s capacity of storing 37,620 TEUs of containers. Port officials say all sorts of port activities were closed on Eid day and no container was delivered on the day. On the day before the Eid day, container delivery dropped to 344 TEUs compared to about 4,000 TEUs usually handed over on a normal working day.

Md Omar Faruk, secretary to Chattogram Port Authority, said the number of import containers rises during every Eid vacation. The pressure will lessen gradually once importers start taking deliveries in full swing.

Khairul Alam Sujan, director of Bangladesh Freight Forwarders Association, said deliveries was yet to gear up because of the long Eid vacation.

Moreover, interested importers are failing to get the delivery as they are not finding the transports required, he said.

Sujan said the congestion might worsen at the end of the week since a good number of import-laden containers, which are waiting at the sea, would be added to the existing stocks of containers.


Newspaper / Obsession with taxing the mobile telecom sector
« on: June 27, 2019, 11:16:16 AM »
Obsession with taxing the mobile telecom sector

There is an obsession in Bangladesh with taxing mobile telecom services. The resulting burden on the sector trickles down to the consumer, hampers growth and draws the country further away from the goals of Digital Bangladesh.

Mobile data services are a luxury

As per the UN Broadband Commission, entry-level broadband services should be made affordable in developing countries at less than two percent of monthly gross national income (GNI) per capita by 2025.

It is, therefore, no surprise that LIRNEasia’s nationally-representative AfterAccess survey found that only 13 percent of Bangladeshis (between 15-65 years) had ever used the internet.

One-third of these internet users (between 15-65 years) cited cost of data as a barrier to further use.

SIM, smartphone and service taxes will discourage mobile use and limit choice

The government’s recent tax proposal to increase supplementary duty (SD) for mobile services to 10 percent will mean that the overall tax burden on consumers rises to 16.67 percent (from 11.35 percent) for data services and 27.77 percent (from 21.96 percent) for voice and other mobile services.

The government also proposes to increase taxes on SIMs and imported smartphones.

SIM tax is a direct tax on access, with negative impacts on first-time mobile users who are likely to be poor consumers. Only Pakistan, Turkey and a few other African countries impose SIM tax. In Bangladesh, this tax has largely been borne by mobile service providers in an effort to bring more people online.

Increasing the charge by 100 percent to Tk 200 will cripple operators if they continue to pick up the tab. If passed on to consumers, this tax will only serve to further depress mobile service adoption among the poor.

Increasing SD on imported smartphones by 15 percent, as proposed, will bring taxes on imported devices to over 50 percent.

In contrast, tax on locally assembled and locally manufactured phones are 17 percent and 5 percent respectively. Even with supposedly cheaper locally made handsets available in the market, 35 percent of Bangladeshis (15-65 years) told LIRNEasia that they are unable to afford a device.

While we commend the government’s efforts to encourage local manufacturing, taxing consumer choice does nothing to improve smartphone ownership in Bangladesh.

Turnover tax and VAT discrepancies are detrimental to industry sustainability

The proposal to increase turnover tax from 0.75 percent to 2 percent will be the nail in the coffin for mobile service providers who are already reeling under financial pressure.

Only Grameenphone has made consistent profits in the past; others are barely breaking even. And state-owned TeleTalk will be the worst victim of this measure.

The discrepancy on VAT rebates is another issue that needs to be remedied immediately. Although VAT on data services is proposed to fall to 5 percent (from 7.5 percent), mobile operators will have no relief as they must continue to absorb VAT as a cost.

Rebates can only be claimed on 15 percent VAT as per the VAT and Supplementary Duty Act 2012 (repealing VAT Act 1991) to be implemented from July 1, 2019.

The government should not expect fresh investments in the mobile networks to improve quality of services, extend coverage and offer capital-intensive 5G connectivity, under these conditions.

Digital Bangladesh will remain a dream

The government’s Digital Bangladesh initiative aims to ensure “Equitable Access for All” by 2021. One of the strategic priorities is to revisit taxation policy for the mobile sector to incentivise investments and expand networks and access to services across the country. This will be vital to mobile service growth in Bangladesh.

The current treatment of the mobile sector is as though it is a demerit good, with SIM taxes levied to curb the expansion of the sector.

This is a far cry from reality, where mobile connectivity and use are recognised as critical enablers to development. It is then hard to imagine why a progressive government would pursue such tax policy, which is grossly counterproductive to wider economic and social development goals.

If the intent is to uplift and grow the sector and ensure that millions more Bangladeshi citizens are able to access digital services, then the tax proposals mentioned above need to be reconsidered.

The poorest consumers, for whom mobile access could deliver the greatest benefits, are likely to be most negatively affected by these proposals. Ill-thought-out tax policies will hamper network investments and widen connectivity gaps such that an inclusive Digital Bangladesh will remain a pipedream.


Newspaper / China halts Canadian meat exports over false certificates
« on: June 27, 2019, 11:11:27 AM »
China halts Canadian meat exports over false certificates

China asked Canada on Tuesday to suspend all meat exports after discovering false veterinary health certificates attached to a batch of pork, while Canadian federal police launched a criminal probe.

The allegations against Frigo Royal Inc. come amid frosty relations between the two nations following Canada’s arrest of a senior Chinese telecoms executive on a US warrant and China’s detention of two Canadian nationals in apparent retaliation.

In days, the US and China could also seek to relaunch talks to settle a trade dispute that may be key to resolving the Canada-China row.

China’s embassy in Ottawa said a customs investigation -- launched after the discovery of traces of a banned feed additive -- revealed up to 188 false documents had been submitted to Chinese officials.

“In order to protect the safety of Chinese consumers, China has taken urgent preventive measures and requested the Canadian government to suspend the issuance of certificates for meat exported to China since June 25,” it said on its website.

“We hope the Canadian side would attach great importance to this incident, complete the investigation as soon as possible and take effective measures to ensure the safety of food exported to China in a more responsible manner,” it added.

A Canadian government official confirmed that the Royal Canadian Mounted Police (RCMP) had been called in to investigate.

Meanwhile, according to Agriculture Minister Marie-Claude Bibeau, the Canadian Food Inspection Agency (CFIA) has reached out to its Chinese counterpart for more information about the allegations.

In a statement, she said the CFIA  “has identified a problem with false export certificates that could affect exports of pork and beef products to China.” - ‘National interest’ - The agency, she added,  “has taken steps to remedy the situation” while continuing to work with industry partners and Chinese authorities.

China is Canada’s third-largest market for pork.

Bibeau noted the issue  “does not affect export certificates to other countries.” The official Xinhua news agency earlier this month said customs officials in the eastern city of Nanjing had found that recent pork shipments from Frigo Royal contained Ractopamine.

The feed additive, which boosts the growth of animals, is widely used in the United States but banned in the European Union and China.

Chinese customs this month increased inspections of Canadian imports in what observers said was more payback for the December arrest of Huawei chief financial officer Meng Wanzhou on a US extradition request related to alleged Iran sanctions violations.

Beijing had previously detained two Canadians -- former diplomat Michael Kovrig and businessman Michael Spavor -- and blocked Canadian agricultural shipments worth billions of dollars.

It later accused Kovrig of espionage and alleged that Spavor provided him with intelligence.

Asked if the meat ban was in retaliation to Meng’s case, Chinese foreign ministry spokesman Geng Shuang said on Wednesday that ensuring food safety is the responsibility of the government and that Chinese authorities acted in accordance with the law.

“As for the Meng Wanzhou case you mentioned just now, I think our position is very clear. We ask Canada to take China’s solemn concerns seriously and immediately release Ms. Meng Wanzhou to let her return to China safely,” Geng told reporters in Beijing.

US President Donald Trump last week told Canadian Prime Minister Justin Trudeau he would raise the case of the detained men with Chinese President Xi Jinping when the pair meet in Japan on Saturday at the Group of 20 summit.

The meeting will be first since trade talks between the world’s two largest economies broke down last year.

Meng’s lawyers, meanwhile, on Monday urged Canada’s justice minister to end the extradition case and release her, saying it was in  “Canada’s national interest.” Justice Minister David Lametti declined to comment on the request while his department on Tuesday said the extradition case would be  “conducted within the guiding principles of the Extradition Act, our extradition treaty and the Charter of Rights and Freedoms.”


US chip firm says it can ‘lawfully’ sell some items to Huawei[/center]

US semiconductor firm Micron Technology said Tuesday it has resumed some sales to Chinese technology giant Huawei despite a ban imposed by President Donald Trump on national security grounds.

The comments from Micron came as the New York Times reported that some American firms have found ways to get around the sanctions on Huawei.

Sanjay Mehrotra, chief executive of Micron, said a company review determined  “that we could lawfully resume shipping a subset of current products” not affected by the export restrictions.

“We have started shipping some orders of those products to Huawei in the last two weeks,” he said.

“However, there is considerable ongoing uncertainties surrounding the Huawei situation and we are unable to predict the volumes or time periods over which we will be able to ship products to Huawei.” The New York Times, citing unnamed sources, said US chip makers and others have found ways to continue sales, getting around the sanctions by selling goods made outside the United States.

According to the report, the products made by American companies overseas are considered exempt from the prohibition, which could allow Huawei to continue to sell products such as smartphones and servers.

The Commerce Department did not immediately respond to a request for comment.

John Neuffer of the Semiconductor Industry Association, a US-based trade group, said in a statement last week that its members  “are committed to rigorous compliance” with the sanctions, but noted that  “it is now clear some items may be supplied to Huawei” based on the current legal framework.

“Each company is impacted differently based on their specific products and supply chains, and each company must evaluate how best to conduct its business and remain in compliance,” Neuffer said.

Huawei founder and CEO Ren Zhengfei said earlier this month that its overseas smartphone sales had fallen by up to 40 percent as a result of the ban.

Trump’s administration has essentially banned Huawei from the huge US market.

Last month it also added Huawei to an  “entity list” of companies barred from receiving US-made components without permission from Washington.

The lack of access to certain technology such as the Google Android system and chip design from British-based ARM Holdings could be crippling for Huawei, which last year was the number two smartphone producer.


Newspaper / Robots to take 20m jobs by 2030: study
« on: June 27, 2019, 10:57:01 AM »
Robots to take 20m jobs by 2030: study

Robots are expected to take over some 20 million manufacturing jobs worldwide by 2030, extending a trend of worsening social inequality while boosting overall economic output, a new study shows.

The forecast set to be released Wednesday highlights growing concerns that automation and robots, while offering economic benefits, are disproportionately killing low-skill jobs and aggravating social and economic stress.

The study by Oxford Economics, a private British-based research and consulting firm, said job displacement from the rise of robots will not be evenly spread around the world, or within countries. Robots have already taken over millions of manufacturing jobs and are now gaining in services, helped by advances in computer vision, speech recognition and machine learning, the study noted.

In lower-skilled regions, job losses will be twice as high as those in higher-skilled regions, even in the same country, the study concluded.

The research comes amid intense debate on the rise of technologies such as self-driving cars and trucks, robotic food preparation and automated factory and warehouse operations and their impact on employment.

Many analysts point out that automation has generally led to more job creation than it destroys, but that in recent years the trend has created a skills gap that leaves out many workers.

According to the latest study, the current wave of  “robotization” is likely ultimately to boost productivity and economic growth, generating roughly as many new jobs as it destroys.

At the high end of the forecast, the researchers see a $5 trillion  “robotics dividend” for the global economy by 2030 from higher productivity.

“We found that jobs where repetitive functions are required are most affected, with those such as warehouse work at imminent risk,” the authors wrote.

“Jobs in less structured environments and which demand compassion, creativity or social intelligence are likely to be carried out by humans for decades to come.” It added that  “robots will increasingly play in sectors including retail, healthcare, hospitality, and transport as well as construction and farming.” The impact will be uneven depending on the country and regions within each country, the study said.

“Automation will continue to drive regional polarization in many advanced economies -- and this trend will intensify as automation spreads to services,” the authors wrote.

But they cautioned against policymakers acting to slow the adoption of robotic technology.

“Instead the focus should be to use the robotics dividend to help those in vulnerable regions ready themselves for the major upheaval ahead,” they wrote.

“Preparing for and responding to the social impacts of automation will be the defining challenge of the next decade.”


Allocation for water, sanitation scarce in rural areas: experts

Although the allocation for water, sanitation and hygiene has increased significantly in the proposed budget, an inadequate allotment for rural and hard-to-reach areas poses a challenge for achieving the Sustainable Development Goal 6, experts said yesterday.

“The urban allocation, mostly for 11 city corporations, has increased but the rural allocation is insufficient as it was seen in the past budgets,” said Hossain Zillur Rahman, a former adviser to a caretaker government.

He spoke at a press conference on “Water, Sanitation and Hygiene allocation in the budget 2019-2020” organised by WaterAid Bangladesh at National Press Club in Dhaka.

In the proposed budget, the urban areas have collectively received about Tk 8,530 crore for water, sanitation and hygiene, known collectively as WASH. On the other hand, the rural areas got Tk 2,470 crore, according to the Power and Participation Research Centre (PPRC).

“This poses a big challenge in achieving the SDG 6, which requires the country to ensure availability and sustainable management of water and sanitation for all,” said Rahman, also the executive chairman of the PPRC. The economist said there are discrepancies in allocation even within the city corporations.

For example, the allocation for the WASH sector in Gazipur City Corporation surged to Tk 680 crore in the proposed budget from Tk 161 crore in the outgoing fiscal year’s revised budget.

Dhaka South City Corporation has received Tk 843 crore, up from Tk 675 crore.

On the other hand, Tk 76 crore was set aside for Chattogram City Corporation, way lower than the Tk 1,078 crore allocated in the revised budget.

Sylhet City Corporation will get only Tk 34 crore whereas it received Tk 87 crore in 2018-19.

“There was no explanation in the proposed budget why the allocation for the Gazipur and Dhaka south city corporations rose while it fell for Chattogram and Sylhet,” Rahman said.

However, he praised the government for the upward trend in budgetary allocation for the WASH sector.

Finance Minister AHM Mustafa Kamal has proposed to allocate Tk 10,161 crore for the sector in 2019-20, up from Tk 9,570 crore in the revised budget.

Rahman said the WASH expenditure trend shows under-utilisation of the allocation.

Human resources and the capacity of local governments, the Department of Public Health Engineering and municipalities need to be enhanced for the proper use of the funds.

He recommended the government raise allocation to meet WASH needs in rural and hard-to-reach areas such as chars, haors and coastal islands and prioritise WASH in the Eighth Five Year Plan in order to meet the SDG targets of safely managed water and sanitation for all.

“We have to ensure that no one is left behind.”

Md Khairul Islam, country director of WaterAid Bangladesh, said geographical inequality still remains in WASH budgeting, with cities and towns receiving a major portion of the funding while the rural and char areas getting much less although they need the most.

Special emphasis should be given on the lowest income quintile, with provision for subsidies to support access to safe water and sanitation, he said.

Mohammad Monirul Alam, WASH specialist at Unicef Bangladesh; Shah Md Anowar Kamal, executive director at Unnayan Shahojogy Team, a national NGO; and Mohammad Zobair Hasan, director at the Development Organisation of the Rural Poor, also spoke.


Newspaper / Mobile users feeling the budget pinch
« on: June 27, 2019, 10:52:34 AM »
Mobile users feeling the budget pinch

Mobile users have already started to feel the heat of the proposed budget for fiscal 2019-20, which proposed doubling the supplementary duty and higher turnover tax on operators, said experts and related bodies yesterday.

Finance Minister AHM Mustafa Kamal in his maiden budget presentation on June 13 called for hiking the supplementary duty to 10 percent from 5 percent, SIM tax from Tk 100 to Tk 200 and turnover tax for mobile operators to 2 percent from 0.75 percent at present.

The government is highlighting digitalisation but in the proposed budget of fiscal 2019-20 it has proposed higher taxes for using technology, said Mohiuddin Ahmed, president of Bangladesh Mobile Phone Consumer Association.

“The supplementary duty has already been passed on to the customers and we know the operators will get some other taxes and those will ultimately fall on the customers.”

Ahmed’s comment came in a roundtable styled “Proposed Budget: Reality in Telecom Sector” organised by the Telecom Reporters Network (TRNB) at the capital’s Best Western La Vinci Hotel.

After raising the supplementary duty the government will earn Tk 1,300 crore more, but it will come from the consumers’ pocket, said Shamim Jahangir, finance secretary to the TRNB.

The hike in SIM tax will hinder the growth of the industry and the increase in turnover tax would raise the cost of doing business and ultimately that will lead to poorer service quality, speakers said.

Mahtab Uddin Ahmed, chief executive officer and managing director of Robi, said the operator logged in profit in the first quarter of 2019 but the proposed tax measures -- which will be the highest in the world -- means the trend will not continue for the rest of the year.

At present, only one operator is seeing profits and the other three are bleeding. Additional taxes on them at this moment would be fatal.

“The policymakers need to look into the matter,” he said.

The government had tried to offer new mobile licences at least three times in the past but found no response though Bangladesh as a market is very lucrative thanks to its huge tech savvy youth population.

 “The only challenge is the tax policy and regulation,” he added. The budget goes against the foreign investment protection act, said TIM Nurul Kabir, the former secretary general of the Association of Mobile Telecom Operators of Bangladesh.

“The policymakers, especially the National Board of Revenue, need to study why foreign companies are leaving Bangladesh. We think we have a serious problem on financial regulation.” Increasing the supplementary duty is a crime when the government is encouraging digital lifestyle and wants to expand the service to the remotest corners, Kabir added.

Meftha Uddin Khan, member of the NBR’s Tax Survey & Inspection department, said this year they are getting huge reactions from different levels, especially from the digital segment.

Md Saiful Islam, an additional secretary to the telecommunication division, said they have already got feedback from different stakeholders, which they passed on to the finance minister.  Hossain Sadat, director and head of regulatory affairs at Grameenphone; Sarwar Hossain Khan, head of tax at Banglalink; and Md Saifur Rahman, a deputy general manager of Teletalk, also spoke on the occasion.


Newspaper / Foreign digital campaigners kept on a tight leash
« on: June 27, 2019, 10:50:10 AM »
Foreign digital campaigners kept on a tight leash

Foreign platforms like social media giants and television channels will now have to appoint their local agents to broadcast campaigns in Bangladesh from next fiscal year, the National Board of Revenue (NBR) said on Tuesday.

The local agents will pay 15 percent VAT on behalf of the foreign entities.

The revenue authority issued the directive as it revs up to implement the VAT and Supplementary Duty Act 2012 from July 1. Most of the local digital campaigners welcomed the move as it will bring transparency and ensure governance.

The market size of digital campaigns is estimated at more than Tk 1,000 crore and the government is deprived of any earning from the transactions.

The NBR said the new law—which will replace the VAT Act 1991—makes it compulsory for non-residents to hire VAT agent here to air programmes or to provide electronic services that are taken by people in Bangladesh.

As per the NBR directive, no local company can run their campaigns and advertisements to any foreign satellite television channels without paying any VAT to the government through the channels’ VAT agents.

This means, owners of satellite channels such as Zee Bangla and Star Jalsha will have to appoint their VAT agents and pay 15 percent VAT on their advertisement revenue from Bangladesh.

At the same time, electronic service providers namely Facebook, Google, YouTube, Messenger, Viber and WhatsApp will also have to do the same, said an NBR letter signed by Hasan Mohammad Tarek Rikabder, first secretary of VAT policy of the NBR.

The NBR requested the secretary of information ministry and chairman of the Bangladesh Telecommunication Regulatory Commission to ask all the non-resident firms to get VAT registration and hire VAT agents.

“We welcome this decision as the local e-commerce companies will be able to pay their digital campaign expenditure in local currency,” said Abdul Wahed Tomal, general secretary of the e-Commerce Association of Bangladesh (e-CAB).

Through this process transparency will be established and the government can get their fair share from the industry.

At present, the total expenditure for digital campaigning on the social media platform is more than Tk 1,000 crore and the government is only getting crumbs from the transactions, he added.

Developed countries and even India have adopted this system a few years ago, said Shahed Alam, head of corporate and regulatory affairs at Robi Axiata.

“Now we can spend on digital campaigning without any fear and can also use the documents to get VAT rebate from the NBR,” he said, adding that mobile operators are the biggest spenders on social media.

Mindshare, a popular digital campaigner with affiliation with different social media platforms, said they are not sure how the process would work.

“We have contacts with different social media platforms. They are observing the situations and what the NBR is going to do,” said Ehsanul Hoque, assistant director of Mindshare.

However, the Association of Television Channel Owners (ATCO) said this is a very minor move and the government needs to be tougher on the companies that are running their campaigns on foreign television channels.

“Companies are doing crime in the name of broadcasting their advertisements and that needs to stop,” said Arif Hasan, vice-president of ATCO.

The government needs to impose 200 percent tax; 15 percent is very minor, said Hasan, also the deputy managing director of Desh TV.

However, the NBR said the move will create a level playing field between the local television channels and the foreign ones.

Currently, local channels have to deposit VAT but the foreign ones do not have to although a number of advertisements broadcasted on the channels for the local audience, said an official of the NBR.

The NBR directive comes following pleas from ATCO to collect tax from the foreign television channels properly.

Newspaper owners earlier on several occasions demanded the revenue authority bring the global social media platforms such as Facebook and YouTube under the tax net as they eat up half the advertisement revenue share of the print media.

Users may face higher subscription fees for satellite channels owing to compliance by the foreign television operators with the VAT law, the NBR official said.


Newspaper / Sari weavers face bleak future
« on: June 27, 2019, 10:48:06 AM »
Sari weavers face bleak future

Weavers in Tangail are going through a difficult time as the sales of the saris they make using handlooms have dropped drastically in the last couple of years.

The price hike of raw materials, women’s dwindling interest in saris, the rise of power looms, and the availability of Indian products are the major reasons behind the fall of the sales of local sari, according to weavers and traders.

During a recent visit to different parts in the district, weavers were found busy making different types of saris, but they are not sure about the business prospects.

“We are not sure whether we will be able to sell all of our saris although we are selling them at a very low profit,” said Suruj Miah, a handloom owner in Dhulutia village under Sadar upazila.

“Now, we can log a maximum profit of Tk 200 to Tk 300 per sari that takes two to three days to make,” he added.

Dilip Das, a sari trader in the district town, said women are losing interest in wearing saris. Rather, they are interested in salwar kameez, especially those brought in from India.

Around two lakh weavers in the district are involved in the handloom industry, according to weavers and traders. They produce different types of saris, including cotton, jute cotton, jal cotton, banarasi, jamdani, katan, silk, half silk, soft silk, gas silk, dotari silk, jute silk, khaddar, baluchuri, and tosor.

“We used to sell saris worth Tk 1 crore during Eid season five years ago. But the sale has fallen to Tk 20 lakh in recent years,” he said.

Shahin Alam, a weaver at Chandi in Delduar upazila, said many handloom owners have already shut their business because of poor business prospects. Many skilled weavers are also moving to other professions.

Mantu Basak, a sari trader, demanded that the government impose higher duty on the imports of saris to help the local handloom industry stay afloat.

Md Rabiul Islam, liaison officer of the Tangail Basic Centre of Bangladesh Handloom Board, said, “We are ready to extend all-out cooperation to revamp the handloom industry.”

The government has already undertaken a project to provide loans to handloom owners at low interest rate, he added.


Newspaper / Pathao downsizing on fund shortage
« on: June 27, 2019, 10:45:53 AM »
Pathao downsizing on fund shortage

Pathao, a ride-hailing company and one of the fastest growing tech startups in Asia, cut more than 50 percent of its workforce in the last two days as it struggles to raise funds amid waning popularity for its services.

According to several sources, nearly 300 mid- to top level employees, including the head of Pathao Food and Ride Core Service, were terminated.

Senior executives from Chattogram and Sylhet were also forced to step down, said the employees who faced the fate.

The finance department of Pathao told The Daily Star that the layoff was due to investors backing out from the upcoming investment round, leaving it with only a few months’ worth of funds to run the company.

The top management had tried to raise $100 million from new investors but the effort went in vain, the sources said.

After the fund-raising move failed, the existing investors asked some senior executives, including CEO Hussain Md Elius, to resign.

Elius, who co-founded the popular ride-sharing business in 2015, refused to step down.

Pathao, which started with motorcycle taxi service in Dhaka, had a flying start. Within a couple of years of its inception, it received an undisclosed amount from GO-JEK, a popular ride-sharing company in Indonesia.

Soon, Alter Global and Openspace Ventures joined in and came up with solutions to overcome infrastructural problems in Bangladesh.

At one point last year, its ride number went past one lakh a day in three cities, namely Dhaka, Chattogram and Sylhet.

However, its popularity started to wane after Uber launched its motorcycle service in Dhaka. Pathao’s daily ride number came down to about 20,000, said a senior executive, who was also forced to resign.

“Non-compliance is a serious issue within the company and this has largely caused its popularity to decline,” he added.

On Tuesday, all sorts of internal communication tools were blocked and the employees who were about to be terminated were separated on Wednesday, said an executive who was sacked.

Once the termination letters had been handed over, the employees were asked to leave the premises immediately, he said.

Pathao Limited, which runs its service in Bangladesh as a foreign entity, has so far served four crore trips or orders and its app was downloaded 50 lakh times, according to its official website. It opened its venture in Nepal last year.

Insiders said the downsizing of the workforce comes at a time when the government was about to issue a licence for the ride-hailing companies operating in the country and non-compliance plays a huge role here.

Industry analysts and investors assume that the investors backed out due to these regulatory reforms and, more importantly, due to global uncertainty on the ride-hailing revenue model as a whole.

Despite uncertainty about the upcoming rounds, Pathao spent an obscene amount on marketing, including more than Tk 1.5 crore to be a sponsor of the Bangladesh Premier League (BPL) T20 tournament, said an ex-employee, who left the company a few months back.

It also spent Tk 2 crore to insure its drivers who bought motorcycles from TVS.

However, The Daily Star was not able to verify the numbers independently.

Contacted, Sayeda Nabila Mahabub, head of marketing and public relations of Pathao, said the firm is entering its next phase of evolution as the largest on-demand platform in Bangladesh.

“Our new comprehensive strategy towards moving Bangladesh will strengthen the core businesses with an increased focus on efficiency. Accordingly, we have introduced changes across all major business lines, leading to significant organisational restructuring and cost optimisations.”

Pathao is preparing for a future where its services are more accessible, customer-centric and reliant on technology. “We are hopeful that this new path will help us stay ahead of the changing market conditions and ensure the company’s long-term success,” she added.

The Daily Star also contacted Openspace Ventures and they said a restructuring has taken place at Pathao, and they believe that the changes will put the company in a strong position to execute its business model.  “Bangladesh remains a country we want to invest in, and we think this allows them to maintain their leading position in the market,” said Hian Goh, general partner of Openspace Ventures.


5 important research topics for property investment success

One thing this latest buzz of investor activity in the property market has demonstrated yet again is that some newcomers to the real estate game still insist on going in blind.

These first timers operate under the assumption that any property makes a good investment and that if things don’t quite pan out, well you can always just offload it and walk away, right?

Property investing, as with any type of financial activity that requires taking on large amounts of debt, has an element of risk attached.

And it’s this risk that you want to mitigate with thorough research, before diving headlong into a deal.

Successful investors know that smart property investments are acquired via a sound investment strategy, around which is built careful planning and research.

So here are the five essential ‘subjects’ you should do some homework into, in order to make it all the way to the top of the property ladder.

1. Your financial capacity and risk profile

Deciding on an investment strategy, based on your long-term investment goals, is critical.

And in order to do so, you need to understand your financial position and capacity to purchase an investment property, as well as how much risk you can handle as an investor.

You can undertake this process with the help of a suitably qualified financial or investment advisor.

Just remember though, free or seemingly ‘cheap’ advice can be very expensive in the long run, so don’t be afraid to pay for a sound, honest assessment of your position.

It may be that you have to wait a while to actually begin your investment journey once you know where you stand, but at least you’ll have a timeframe and with that in mind, can prepare by moving on to research…

2. Your property investment team

It takes a lot of combined and complementary knowledge to create a successful property investment strategy and portfolio.

It’s important to find advisers who has personal successful track records in property investment– a suitably qualified accountant, financial adviser, mortgage broker and buyer’s advocate can all be exceptional additions to your investment team.

Conversely, you need to be aware of people who are not necessarily looking after your best interests (like real estate agents who work for the vendor), property promoters and spruikers, or ‘armchair’ experts who are largely unaware of market fundamentals, let alone your personal financial position.

3. Your preferred property market(s).

Once you identify your investment strategy, you should have a clearer idea as to the type of location that will best complement your plans.

Remember, not all land is created equal and while many of the properties  on the market at any given time might be fine for a family home, they may not be what we consider an “investment grade property.”

You need to qualify potential locations based on the history of capital growth achieved and likelihood of future capital growth based on the demographics of the area (the local residents ability to afford to keep buying property) and the local supply and demand factors.

Then drill down into the best street in that suburb and the best side of the street in that suburb.

Look for areas that have outperformed the long-term averages with consistency.

Selecting the optimal location is about facts and figures, so never invest in a place based on whether or not you would want to live there, but whether it appeals to a broad owner-occupier and tenant demographic.

    Does current or future projected demand look set to outstrip supply and underpin values for some time to come?
    Is the area undergoing gentrification? Gentrification is a change in the fortunes of a suburb as it is discovered by a higher income demographic which slowly pushes out the lower income residents. These new, more affluent residents invest time and money improving their new neighbourhood, pushing up prices and rents.
    Is there a lot of spending (private and public) on infrastructure upgrades and development?

These are the types of questions you should ask.

4. Your best property investment

Once you have the location sorted, it’s time to think about the type of property that will best suit your investment strategy and the market in which you’re purchasing.

Remember, no two suburbs or streets are alike and you’ll always find pockets of real estate that represent more or less potential in any given area.

Usually properties within close proximity to essential amenity, targeted toward the primary demographic of the region, will be in greater demand and therefore, dominate when it comes to capital growth.

For instance, in suburbs that are family friendly you want to be close to the best schools and healthcare.

For younger resident demographics, the walkability factor (walkable suburbs will outperform in the future) and ease of access to things like public transport, shops and cafes will prove popular with tenants and buyers alike.

5. How much you should pay

Once you identify a likely contender for your portfolio, you need to make sure you don’t pay too much for it and lose essential upfront capital.

There are numerous market research companies who provide reports on the sales history of a property and/or comparable properties for a small fee, so you can undertake this research on your own.  property

The other option is to engage an investment savvy buyer’s agent who should have sufficient knowledge of the local real estate market to advise what they believe the property is actually worth.

Don’t stop there!

Importantly, successful property investors recognise that once they have acquired a new asset for their portfolio, the research doesn’t just end.

Rather than resting on their laurels, this is the time that smart property investors really kick it up a notch, critically evaluating their portfolio’s performance on an annual basis and ensuring they maintain an optimal investment and finance structure to maximise their gains and minimise their risks.

This includes considerations like how you structure your investment ownership, manage your investment related debt and create the optimal tax position – all factors that will change over time as you grow your portfolio, but that careful forward planning and research can better prepare you for, today.


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